Pemex Initiates the Process of Financial Consolidation to Rescue Mexico’s Energy Sovereignty

With the Strengthening Program announced today by the Mexican Government, Petróleos Mexicanos (Pemex) begins a financial consolidation cycle that will allow for financial improvement, ending corruption, and, above all, increasing investment without subscribing debt, the company’s CEO, Octavio Romero Oropeza pointed out.

Speaking before the President of Mexico, Andrés Manuel López Obrador, Romero Oropeza mentioned that, as part of these measures, Pemex will have additional income of 107 billion pesos, thus injecting capital for 25 billion pesos, which will result in a gradual reduction of the company’s tax burden for a cumulative amount of 15 billion pesos per year, which will reach 90 billion pesos by the end of the six-year presidential term.

Additionally, he said, a monetization of promissory notes for labor liability will account for 35 billion pesos, and an extra income for 32 billion pesos is expected to result from fighting fuel theft in the country.

In a press conference held at the National Palace, Romero Oropeza assured that the support to Petróleos Mexicanos is given within a framework of fiscal responsibility, and he stated that, as part of these actions, investments will be redirected to areas where oil can be easily extracted.

With the Strengthening Program for Petróleos Mexicanos, the Pemex CEO explained, a cycle of financial consolidation will be initiated, beginning this year with a process that will turn Pemex into a productive, healthy company. “We will have development, the likes of which we haven’t seen in many years. Throughout this process, 20 new fields will be developed, 16 in shallow waters and four onshore,” he added.

“This great effort that is being made by the Government of the Republic through the Ministry of Finance and Public Credit, must go hand in hand with a great commitment from the company. The support we are receiving will allow us to invest without plunging Pemex into debt. Therefore, we must be very careful with our resources,” Romero Oropeza said.

Later, the Pemex CFO, Alberto Velázquez García, reported that this fiscal incentive will help the company to increase its 2018 investment of 204 billion pesos to 288 billion pesos in 2019, almost 36 per cent more in real terms.

“With these new measures, the support from the Government of the Republic, the company’s financial discipline, controlled expenses and the austerity policies already in place, we will not subscribe any debt in 2019; for the first time in 10 years, Pemex will not contract new debt,” Velázquez García pointed out.